Rent it Right
by Janet Portman, Inman News
Q: I’m renting an apartment to two college kids. I’ve got their parents on the lease as guarantors. When I collected the security deposit, it came as two checks, in equal amounts, from each set of parents.
Does the fact that the parents have paid the deposit mean that I have to include them in the move-out inspections?
Does it give them the right to contest my use of the deposit money, including any deductions I might make at the end of the tenancy?
Can they take me to small claims court, instead of or with their kids as plaintiffs? I’m worried because one of these parents is a lawyer. –Henry H. A: Even if all four parents were lawyers, I doubt that they’d succeed if they tried to assert the tenant rights that you mention.
By furnishing the security deposit (or even paying the rent, for that matter), these parents have indirectly given their children a gift, or at most a loan. Unless you agree that these gift-givers or lenders can have a seat at the landlord-tenant table, the parents are out of the picture, legally speaking.
There are lots of situations where parents (or others) pay the bills but don’t enjoy the rights that traditionally come with their purchase. For example, many parents pay college tuition, but this does not entitle them to view their children’s academic or other records, nor does it entitle them to attend class! Parents often pay insurance premiums for their kids, which insurance companies are happy to receive. But parents don’t have the right to start using the pediatrician as their primary care physician; they’ll need to purchase or rely on their own health insurance for their own medical needs.
In the world of commercial leasing, however, the rules are somewhat different. There, the “parents” (to the landlords, in this case) are often banks that have lent landlords the money to buy a building. The bankers want to make sure that the landlord doesn’t do anything that might jeopardize his ability to repay the loan. To protect their investment, the banks insist on being part of every leasing transaction. The banks often review the leases and take other steps to make sure things work out as planned.
It’s conceivable that your tenants’ parents could insist on a similar arrangement, getting you to agree in a lease provision, for example, that they will be notified of any inspections and any deductions you intend to make from the deposit. But that’s about as far as they could go.
Even if you wanted to, you probably cannot give them the right to take you to court on behalf of their children because the right to sue — called “standing,” in legalese — is something the legislature, not a private party, confers. Because the parents are not technically your tenants, they also don’t have the legal rights granted to tenants by state law, including the right to sue a landlord. Your answer to the parent who expects that his check-writing will entitle him to assert his child’s tenant rights should be a polite, “I don’t think so.”
One would hope that instead of trying to figure out how to intervene in future disputes with their children’s landlord, parents might consider spending that time educating their kids in the rights — and responsibilities — of being a tenant. If the student-tenant doesn’t get the picture, and loses some of that deposit to well-founded deductions, he can think of this as yet another college class — Hard Knocks 101.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
To subscribe to our blog, click here.